BTW, the "u" in the name is properly pronounced like "uh", not "oo". Chappelle mispronounces it as "Juicy" just to be insulting. He also pronounces the last name like "sommelier" (French word for a wine steward).

There's a previous part of the performance in the posted video, where Chappelle talks about the difference between how black folks lie and other people lie. He pointed out that when black males lie, they don't often come up with credible, reasonable-sounding lies, but instead fantastic, highly-unlikely (ridiculous) scenarios. 

He gave examples. Then he repeated what Smollett said happened to him and the audience roared with laughter. When he rolled his eyes and nodded his head ruefully. 

The best part of the video for me is the imagined interaction with a Chicago cop/Smollett as the officer takes his "statement" regarding the incident.